Final answer:
Sugar is the crystalline ingredient that tenderizes baked products by competing with gluten for water, thus cutting gluten strands and resulting in a softer dough.
Step-by-step explanation:
The crystalline ingredient known for tenderizing baked products by cutting gluten strands is sugar. Gluten is a network of proteins, primarily glutenin and gliadin, that provides elasticity and strength to dough.
When sugar is added to the dough, it competes with gluten for water, which in turn softens the dough by inhibiting the formation of gluten networks.
This results in a tender crumb in baked goods, such as cakes and cookies. Furthermore, sugar also contributes to the browning and flavor of the final product through the Maillard reaction and caramelization.